MIAMI—Triple net leased assets in South Beach are in high demand, but what about North Miami Beach? The latest trade signals investors are finally looking a little further north for some triple net action.
Marcus & Millichap just brokered the sale of a 7,344-square foot triple net leased Chevron. The Miami Beach, FL asset sold for $5,050 million. The sale price represents $688 per square foot and a 7.1% CAP rate.
Ronnie Issenberg, a vice president investments, and Scott C. Sandelin and Gabriel Britti, associate vice president investments, in M&M’s Miami office, had the exclusive listing to market the property on behalf of the seller, a private investor from Sunny Isles, FL. The M&M trio also secured the buyer, a limited liability company from Bay Harbor Islands, FL.
“The North Beach business district has long been ignored and considered by investors as a dead area,” Sandelin says. “The strong interest in this asset from the investor community marks a distinct change in the attitude towards this potential up and coming area.”
The net leased property is 100% leased to a one-unit operator and branded by Chevron. The tenant has seven years remaining on an absolute triple net lease. The offering includes the service station, convenience store, U-Haul truck rental facility on the adjacent parking lot, and second floor rental apartment units.
“Due to its strategic location along Harding Avenue, a main south bound corridor leading directly to South Beach, the tenant enjoys considerably high margins, strong U-Haul rental rates and 100 percent occupied apartments,” says Issenberg. The triple net leased asset is located at 401 71st Street.
We caught up with Paco Diaz, a senior vice president with CBRE in Miami, to get his take on the boom in the local retail market. He told us Miami is now considered a “global city,” and as a result, there is tremendous interest from both investors and tenants.
“The vacancy rate dropped to 3.9% in the second quarter of 2014,” Diaz says. “That’s the lowest I’ve ever seen it in my 38 years in the business.”